Bharat Forge-Is the pain over?
Printed From: The Equity Desk
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Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=2219
Printed Date: 21/Apr/2025 at 2:56pm
Topic: Bharat Forge-Is the pain over?
Posted By: hit2710
Subject: Bharat Forge-Is the pain over?
Date Posted: 04/Jul/2009 at 1:14am
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Bharat Forge is one of the leading forging companies in the world. It is managed by Baba Kalyani of the Kalyani group.
There were various problems associated with the scrip:
1. Slump in the auto industry
2. FCCB issue
3. Subsidiaries which could act as a drag on the bottomline.
To address these issues, management decided to focus on non automotive business by making foray into forging components for the non automotive sectors especially power etc. This strategy will reduce the risk of auto industry slowdown and increase the margins of the company because there is a lot of value addition in non automotive business.
The Unaudited results for the Quarter ended March 31, 2009
The Company has posted a net profit of Rs 611.30 million for the quarter ended March 31, 2009 as compared to Rs 828.50 million for the quarter ended March 31, 2008. Total Income has decreased from Rs 5923.10 million for the quarter ended March 31, 2008 to Rs 3068.40 million for the quarter ended March 31, 2009. The Audited results for the Year ended March 31, 2009 The Company has posted a net profit of Rs 1032.90 million for the year ended March 31, 2009 as compared to Rs 2735.90 million for the year ended March 31, 2008. Total Income has decreased from Rs 22588.40 million for the year ended March 31, 2008 to Rs 21063.50 million for the year ended March 31, 2009. The Consolidated results are as follows: The Audited consolidated results for the Year ended March 31, 2009 The Group has posted a Income attributable to the consolidated group of Rs 582.60 million for the year ended March 31, 2009 as compared to Rs 3015.30 million for the year ended March 31, 2008. Total Income has increased from Rs 47304.60 million for the year ended March 31, 2008 to Rs 48427.50 million for the year ended March 31, 2009. Exports emerged as the saving grace for the company, registering a 4% growth for the full year. Important to add that the exports grew despite the drastic fall in production in the company’s exports markets because of two factors. One, the company managed to increase its market share and second, it tapped newer segments like the non-automotive forgings. Speaking of latter, its contribution to the company’s standalone topline increased to 28% from 20% in FY08. The fact that the rupee weakened against the dollar and the company was able to pass through raw material cost hikes also helped growth in exports. As far as the prospects for the current fiscal are concerned, the company is of the belief that the worst is behind us and Bharat Forge’s own performance might be better than that witnessed in the second half of the fiscal.
------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Replies:
Posted By: hit2710
Date Posted: 26/Jul/2009 at 3:26pm
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q1 results not very great.
Stock price still moves up. There is expectation that non automotive business is going to be a big factor for the stock going forward and market seems to have got over the disappointment of the last three quarterly numbers.  ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: hit2710
Date Posted: 03/Aug/2009 at 2:35pm
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BHARAT FORGE 238
I THINK STOCK IS GOING UP MORE IN HOPE THAN FUNDAMENTALS. BOOKED OUT SMALL POSITION TODAY. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: Hitesh Shah
Date Posted: 03/Aug/2009 at 4:51pm
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http://moneycontrol.com/mccode/news/article/news_article.php?autono=409446&special=highlights - See Rs 7000 cr rev from Alstom JV in 4-5 yrs: Bharat Forge
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Posted By: subu76
Date Posted: 03/Aug/2009 at 4:56pm
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hit...In my opinion....if you have got a good price on Bharat Forge...you don't want to let it go for some shall change gains......even if the price fluctuates temporarily....
it's important to ride these strong cyclicals into good economy.......
Otherwise what is the point in providing support during bad times?
i.e. unless you have found a far more attractive deal
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Posted By: hit2710
Date Posted: 03/Aug/2009 at 6:50pm
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I had bought only 150 shares at around 145 in the hope of getting something like 50 % returns over six months and now I am getting more than I bargained within one and a half months and hence I exited. Besides I feel it has run up too fast on some good news. I might consider re entering at some lower levels otherwise plenty of bargains out there. I am not too comfortable playing cyclicals. I have set my sights on some smaller stocks. Let us see if markets oblige and correct. I am slowly getting into cash mode. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: khokhadream
Date Posted: 03/Dec/2009 at 1:28pm
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http://m.timesofindia.com/PDATOI/articleshow/5294075.cms
To me bharat forge looks to be a solid candidate for long term. 2012 onwards it looks like this company will have solid revenue stream. It looks like a good infrastructure play to me. Can anyone cite any risk factors going forward. |
Posted By: nazgul
Date Posted: 03/Dec/2009 at 2:46pm
this looks like an interesting piece indeed..... i wasnt aware that our power manufactiring companies didnt have anything good enough to match alstorm technology. ------------- I don't do funds, i do fundas. |
Posted By: hit2710
Date Posted: 03/Dec/2009 at 6:07pm
Biggest risk factor is that prospects of 2012 are being discussed and discounted currently. On a more fundamental note, since the revival of auto industry worldwide, Bharat Forge should start reporting healthy numbers going forward. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: khokhadream
Date Posted: 03/Dec/2009 at 10:45pm
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By 2014-15, more than 75% of BFL’s revenues will come from
non-automotive businesses, especially through initiatives in power, oil and gas,
marine transport, railways and aerospace sectors. “A double-digit growth
for the Indian economy requires a major expansion of the capital goods sector to
effectively feed an industrial upsurge. We aim at contributing to the growth of
the capital goods sector in India,” says Baba Kalyani, chairman, BFL. It
has garnered its most expansive plans in power sector. Hi Basantji, Considering this whats your take on this. - this company has very good management - from 2014 onwards the non-automotive revenue share will be 75% which appears to be huge. Also it will bring lot of stability to the revenues. - However I read somewhere there is chance of 10-12% equity dilution in future. - Comprehensive infrastructure play with strong and quality manufacturing capability. Basantji it would be great if you could share few thoughts about this company |
Posted By: basant
Date Posted: 03/Dec/2009 at 6:26am
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Ordinary business; phenomenal management; focuses on RoE and cash flows. I missed it earlier this year because of its export linkages but I read that Rs 10,000 invested in 1979 has become close to Rs 1.7 crores!!! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: khokhadream
Date Posted: 03/Dec/2009 at 6:48am
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Thanks a lot Basantji, this is about 28% CAGR and that too for a period of 30 years. really impressive. http://www.indiaabroad.rediff.com/money/2005/jun/13spec1.htm http://knowledge.wharton.upenn.edu/article.cfm?articleid=1657&specialid=62 Good articles about the company. "Firstly, auto ancillary business has far more entry barriers than software services. What makes the auto ancillary tougher is that unlike in IT services, cost competitiveness alone is not the key driver - it is an extremely skill- and design-intensive industry. It takes a long time to develop competencies in this business. Having developed the skill
sets, put up capacities and established credentials with clients, it is
only a matter of leveraging that strength for Bharat Forge. It is looking very expensive at the moment but we have to take into account fate of GM and Ford which did the damage to Bharat Forge. Once auto stabilizes and other revenue streams starts to chip in then we can have solid compounder once again |
Posted By: khokhadream
Date Posted: 11/Feb/2010 at 12:11pm
http://www.financialexpress.com/news/Bharat-Forge-to-raise-Rs-600-cr--QIP-soon/578663/Can anybody comment on above development and its possible impact. I am thinking of building long term position in this stock if it tumbles because of temporary development. |
Posted By: shontou
Date Posted: 11/Aug/2011 at 10:58am
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Conference Call
Bharat Forge Will focus to expand margins of overseas subsidiaries in 18 months Bharat Forge held conference call on 10th Aug 2011 to discuss its performance for the quarter ended June 2011. The meeting was presided over by Mr. Amit B Kalyani - Executive Director, Mr. Sanjeev Joglekar – CFO and Mr. Mohan Sapre - Sr. VP (Finance) Key Highlights from the Discussion Despite the weakness abroad, the company has not yet received any indication of change in plans for its customers. Its major customers expect 30-40% growth this year. It has lined up capex of Rs 200-250 crore per year in FY 12 and FY 13. It includes the capacity expansion of machining by 30-35%. It plans to expand margins of international subsidiaries from single digit to double digit in next 18 months. It plans to double the machining in non auto from current 30% in 1.5-2 years. Expects the Alstom JV to start generating significant revenue from 2013. It sources 20% of steel requirement from Kalyani Steel which has been shutdown. The production grew by 24% to 52959 tonnes from 42643 tonnes in June 2010 quarter. Exports grew by 67% driven by CV demand and improvement in non auto front in US and Europe. Non auto business grew by 51% to Rs 284 crore in June 2011 quarter on ramp up of new plants and demand from domestic and exports across sectors. It constituted 37% of standalone topline. Significant position of non auto business is in India now. The share of India in non auto business would be 40% and 60% in overseas in 2-3 years time. Contribution from new facilities to topline was Rs 161.50 crore, up by whopping 98%. The capacity utilization of older plants was at average 78%, of new plants at 50% and of subsidiaries at 55%. Net working capital as 30th June 2011 is Rs 590 crore. ------------- Every day, self-proclaimed stock market "experts" tell us why the market just went up or down, as if they really knew. So where were they yesterday? |